Rohit Jain, Deputy Governor of the Reserve Bank of India, stated at Global Fintech Fest 2026 that banks and regulated entities cannot outsource responsibility for decisions made by AI or algorithmic models, even if the computation is outsourced. He emphasized that institutions remain accountable for the consequences of these decisions, regardless of the complexity or sophistication of the AI systems involved, according to medianama.com.
Jain explained that while institutions may outsource the computational aspect of AI models, they cannot outsource the consequences of decisions derived from those models. He highlighted that the growing sophistication and unexplainability of AI models do not reduce the accountability of institutions. Jain also stressed the importance of proportional regulation, noting that different AI applications carry different levels of risk and should be governed accordingly. For example, tools used for internal document summarization should not be regulated the same way as systems that autonomously approve credit or execute financial transactions.
This stance by the RBI underscores the need for strong governance, validation, oversight, and intervention mechanisms in AI applications within the financial sector. It aligns with global regulatory trends emphasizing accountability in AI use, especially in high-stakes financial decisions. The RBI’s approach differentiates between AI tools based on their impact, reflecting a nuanced regulatory framework that balances innovation with consumer protection.
Jain also pointed out that customers affected by significant financial decisions deserve more than just an explanation; they require meaningful recourse and transparency. His remarks at the Global Fintech Fest 2026 set a clear expectation for Indian financial institutions to maintain accountability for AI-driven decisions.